Many of us are accustomed to using our credit cards to make payments abroad, but when you cannot do so, a bank transfer to a country in the Eurozone can be expensive.

And Britons are paying up to 10 times more than other countries for the privilege.

The UK chose to opt out of the Euro transfer regulation in 2003

Money Box listener Andrew has part-ownership of a house in Spain, and needs to make mortgage payments every month.

He is frustrated with the way his bank, Lloyds, charges him every time.

"I need to make monthly payments in Euro. I would like to make these payments without having to pay £10 each time. I think £10 is an unreasonable amount," he said.

But Lloyds is not the only bank to do this. HSBC, Natwest and Barclays, charge between £8 and £10 per Euro transfer, and Nationwide charges £20.

And this cost is not just a concern for people with holiday homes abroad.
It has become a headache for online shoppers too.

Dan Wilson, of eBay, the online auction site, explained: "We have lots of people making lots of transactions cross-border, typically for smaller amounts.

"When people are transferring money through a banking system, high charges can be prohibitive."

Making a payment from Spain to France in Euro should cost no more than moving money from Barcelona to Madrid

Some eBay sellers offer buyers the chance to send money for goods through a system called Paypal, and arranging payment this way is cheaper than bank transfer.

But Paypal has been slower to take off with sellers in continental Europe, which can be a problem for potential buyers in the UK.

In 2003, new a European regulation came into force, which held that EU members had to offer transfers in Euros between countries at the same charge as domestic Euro transfers.

So making a payment from Spain to France in Euro should cost no more than moving money from Barcelona to Madrid.

Similarly, transfers from the UK to mainland Europe in Euro should cost no more than the charge of a Euro transfer from one UK bank to another.

Eurozone

However, as the UK is not a member of the Eurozone - the 12 countries who have adopted the Euro as their currency - domestic Euro transfers within the UK are more expensive than domestic Euro transfers within Eurozone countries.

And this makes our Euro transfers abroad more expensive than transfers from Eurozone countries.

But that may be small consolation to those who make transfers.

Eurozone countries

Austria

Belgium

Finland

France

Germany

Greece

Ireland

Italy

Luxembourg

The Netherlands

Portugal

Spain

However, Sweden is an example of a non-Eurozone country which has lowered the cost of transfers.

Like the UK, Sweden is a member of the EU but not the Euro. But the Swedes elected to opt their own currency into the regulation.

This meant transfers in Swedish Krona to outside Sweden cost the same as domestic Krona payments.

So the Swedish currency is moving around Europe at a similar cost to Euro transfers.

This put downwards pressure on the cost of their domestic Euro payments, which had a dramatic impact on the price of their Euro transfers abroad.

Price change

Sten Torsten, from the largest Swedish high street bank, SE Banken said: "We changed our prices, which meant a change from 100 Krona or above for payments to 50 Krona, if you do it in the branch, or 10 Krona if you do it via e-banking."

Given that most people do make these payments online, Swedes are paying 76p per transfer, and people in the UK pay over 10 times what Swedish customers pay to do the same thing.

BBC Radio 4's Money Box wanted an answer from the banks as to why they are charging so much.

The British Bankers' Association would not be interviewed, saying the issue was one for the Association for Payment Clearing Services (Apacs).

Apacs said the charges were a "competitive issue" for the banks but did say that "at no stage have the banks tried to shirk their responsibility under the law".

It also said that on the whole, UK banks offer cheaper banking to customers than our European neighbours.

But unless the cost of domestic Euro transfers falls, that is little comfort to people like Money Box listener, Andrew, making regular Euro payments abroad.

BBC Radio 4's Money Box was broadcast on Saturday, 19 February 2005, at 1204 GMT.